FIDELITY SOUTHERN CORPORATION FIDELITY BANK EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of the 18th day
of January 2007, by and among FIDELITY SOUTHERN CORPORATION (“Fidelity”), a Georgia
Corporation, FIDELITY BANK (the “Bank”), a Georgia banking corporation, and Xxxxx X. Xxxxxx, Xx.
(“Xxxxxx”). The Employment Agreement among Fidelity, the Bank and Xxxxxx dated January 19, 2006
(the “2006 Agreement”) is hereby terminated and replaced by this Agreement effective as of January
1, 2007; provided, however, that Xxxxxx shall retain all rights to any incentive compensation
payable under the 2006 Agreement, which was earned and payable as of the date hereof.
WHEREAS, Xxxxxx is the Chairman and Chief Executive Officer of Fidelity and the Bank;
WHEREAS, Fidelity and the Bank agree to continue to employ Xxxxxx as Chief Executive Officer,
subject to his election, to provide the services set forth herein; and
WHEREAS, Xxxxxx agrees to accept such employment and to continue to provide such services in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein made and of other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Employment/Duties.
(a) Fidelity and the Bank shall employ Xxxxxx as the Chief Executive Officer during the term
of his employment as set forth in this Agreement and Xxxxxx hereby accepts such employment. Xxxxxx
also agrees to serve as the Chairman of the Board of Directors of Fidelity (the “Board”) and of the
Bank upon his election to such positions.
(b) Xxxxxx shall be the senior executive officer of Fidelity and the Bank and shall be
responsible for the strategic and general operations of the business of Fidelity and the Bank and
shall have such authority consistent with such positions and necessary for the conduct of such
business under the general direction of the Boards of Directors of Fidelity and the Bank.
(c) Xxxxxx agrees that he will at all times and to the best of his ability and experience
faithfully perform all of the duties that may be required of him pursuant to the terms of this
Agreement and shall comply with all policies and procedures adopted by the Board of Directors or
any committee thereof. Xxxxxx shall devote his full business time to the performance of his
obligations hereunder.
(d) The term of employment of Xxxxxx shall be for a term of three (3) years, commencing as of
January 1, 2007, and may be extended upon written agreement of the parties.
(e) Xxxxxx shall be prohibited from serving as a director of other businesses and as a member
of any committee of the board(s) of directors thereof unless the Boards formally have approved such
service before Xxxxxx becomes any such director or member of any committee of such board(s) of
directors.
2. Compensation.
(a) Base Salary. During the term of the employment of Xxxxxx hereunder, Fidelity and
the Bank will pay to Xxxxxx an aggregate base salary (“Base Salary”) at the rate of $600,000 per
year, payable in arrears in equal semi-monthly payments, subject to applicable withholdings and
deductions. In the event of the disability of Xxxxxx, to the extent payments are received by him
under any employer sponsored disability program and/or under any disability policy the premiums of
which are paid by Fidelity or the Bank, the payments hereunder are to be reduced by an amount equal
to any such disability payments that are intended to replace all or a portion of any compensation
Xxxxxx loses due to such disability.
(b) Incentive Compensation. Fidelity and the Bank shall pay to Xxxxxx the incentive
compensation (“Incentive Compensation”) determined as set forth in Attachment A hereto.
Xxxxxx shall be eligible to participate in incentive plans and programs hereafter adopted as
determined by the Board or the Compensation Committee of the Board.
(c) Employee Benefit Programs. Xxxxxx shall be eligible to participate in all
employee benefit programs, including medical, dental and hospitalization programs, now or hereafter
made available by Fidelity to its employees and/or executives, subject to terms and conditions of
such programs, including eligibility. It is understood that Fidelity reserves the right to modify
and rescind any program or adopt new programs in its sole discretion.
(d) Life Insurance for Fidelity.
(i) Fidelity may, in its sole discretion, maintain key man life insurance on the life of
Xxxxxx and designate Fidelity as the beneficiary. Xxxxxx agrees to execute any documents necessary
to effect the issuance of such policy.
(ii) Xxxxxx hereby acknowledges that he has consented to the purchase and maintenance by
Fidelity of the Split Dollar Insurance Plan (the “Split Dollar Plan”) in the face amount of
$400,000 dated October 3, 1984 (including all amendments and replacement and substitute policies,
as hereafter mutually agreed in writing). The policies purchased and maintained by Fidelity under
the Split Dollar Plan shall be maintained by Fidelity at all times hereafter, including after the
termination of this Agreement or Xxxxxx’x Termination of Employment. In addition, Fidelity and the
Bank agree to maintain three Flexible Premium Adjustable Life Insurance, Universal Life policies
issued by Great-West Life & Annuity Insurance Company (“Great-West”) one in the face amount of $6
million, one issued by Life Investors Insurance Company of America (“Life Investors”) in the face amount
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of $800,000 and one issued by Mass Mutual Financial Group (“Mass Mutual”) in the face amount of
$800,000 (including all replacement and substitute policies, as hereafter mutually agreed in
writing) each of which is payable to beneficiaries designated by Xxxxxx or his estate or trust in
lieu thereof, at all times hereafter (except as provided in Section 3(e)), regardless of the
termination of this Agreement or Xxxxxx’x Termination of Employment hereunder including a
Termination of Employment pursuant to Section 3.
(e) Vacation. Xxxxxx is entitled to five (5) weeks vacation each year. Vacation
shall be taken at such times as not to materially interfere with the business of Fidelity. The
vacation time must be taken prior to the end of each calendar year or as otherwise mutually agreed
in writing, otherwise it expires to the extent not taken.
(f) Expenses. Fidelity shall pay all reasonable expenses incurred by Xxxxxx in the
performance of his responsibilities and duties for Fidelity, including without limitation, dues
payable to the Atlanta Athletic Club and the Capital City Club and to such reasonable civic
organizations of Xxxxxx’x choice. Xxxxxx shall submit to Fidelity periodic statements of all
expenses so incurred in accordance with the policies of Fidelity then in effect. Subject to such
reviews as Fidelity may deem reasonably necessary, Fidelity shall, promptly in the ordinary course
of business, reimburse Xxxxxx for the full amount of all such expenses advanced by Xxxxxx.
(g) Automobile. Fidelity will continue to provide Xxxxxx with an appropriate
automobile for his use and will maintain and insure it at Fidelity’s expense.
3. Early Termination.
(a) For Cause.
(i) Notwithstanding the foregoing, Xxxxxx may have a Termination of Employment by the Board
“for cause” (as hereinafter defined) at any time upon 10 business days’ prior written notice. The
term “for cause” shall mean (A) the commission of a felony or any other crime involving moral
turpitude or the pleading of nolo contendere to any such act, (B) the commission of any act or acts
of dishonesty when such acts are intended to result or result, directly or indirectly, in gain or
personal enrichment of Xxxxxx or any related person or affiliated company and are intended to cause
harm or damage to Fidelity, the Bank or their subsidiaries, (C) the illegal use of controlled
substances, (D) the misappropriation or embezzlement of assets of Fidelity, the Bank or their
subsidiaries, (E) the breach of any other material term or provision of this Agreement to be
performed by Xxxxxx (other than pursuant to Sections 4, 5, 6 or 7) which have not been cured within
thirty (30) days of receipt of written notice of such breach from the Board or the board of
directors of the Bank, or (F) the breach of any provision of Section 4, 5, 6 or 7 during his
employment.
(ii) Upon a Termination of Employment for cause, Fidelity and the Bank shall have no further
obligation to pay any compensation to Xxxxxx or make available to Xxxxxx participation under any
employee benefit program for periods after the effective date of
the Termination of Employment for cause. Upon such a Termination of Employment, the
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Base
Salary which accrued as of the termination date, the Incentive Compensation payable pursuant to
Section 2(b) for the periods of employment and accrued but unused vacation pay will be paid after
the effective date of termination on the next normal payroll payment date.
(b) Other Termination by Fidelity.
(i) Xxxxxx may have a Termination of Employment by Fidelity or the Bank for any reason (other
than for cause, death or total disability (as defined in Section 3(d)(iii) below)) at any time upon
at least 90 days’ prior written notice. Upon such a Termination of Employment, the Base Salary
which accrued as of the termination date, the Incentive Compensation payable pursuant to Section
2(b) for the periods of employment and accrued but unused vacation pay will be paid after the
effective date of termination on the next normal payroll payment date. Xxxxxx’x right to
additional compensation after the effective date of termination shall cease, except that if Xxxxxx
executes a “Release” (as defined below) within the time period specified by Fidelity or the Bank,
and does not revoke such Release, Xxxxxx will be paid severance equal to the excess of (i) three
times his then Base Salary over (ii) the aggregate amount payable under Section 8 below. If Xxxxxx
is not a Specified Employee (as defined below) such severance benefit will be payable in 72 equal
semi-monthly installments commencing on the 15th or last day of the month immediately
following the date of the Termination of Employment, whichever date occurs first, and then
continuing on the 15th and last day of each calendar month thereafter until all such installments
are paid. If Xxxxxx is a Specified Employee, such severance benefit shall not be payable until the
first 15th or last day of the month which is at least six months after Xxxxxx’x
Termination of Employment. All installments, which would have otherwise been required to be made
over such six-month period if Xxxxxx had not been a Specified Employee shall be paid to Xxxxxx in
one lump sum payment as soon as administratively feasible after the first 15th or last
day of the month which is at least six months after Xxxxxx’x Termination of Employment. After the
lump sum payment, the remaining semi-monthly installments (each equal to 1/72 of the total
severance benefit) will continue on the 15th and last day of each calendar month until
all such installments are paid.
(ii) Additionally, if Xxxxxx timely executes and does not revoke a Release and elects such
continued participation, the employee welfare benefits as provided in Section 2(c) shall be
continued for eighteen (18) months from the date of termination at a cost to Xxxxxx not to exceed
the amounts paid by executives for such employee welfare benefits; provided, however, that if
continued participation in any of such employee welfare benefit plans is not possible under the
terms of such plans or any provision of law would create any adverse tax effect for Xxxxxx,
Fidelity or the Bank, due to such participation, Fidelity will provide substantially identical
benefits directly or through an insurance arrangement or pay Xxxxxx’x costs for such welfare
benefits if continued by Xxxxxx, including as permitted under ERISA. Notwithstanding the above, if
Xxxxxx is a Specified Employee and if Fidelity or the Bank determines that any portion of such
employee welfare benefits are subject to Section 409A of the Code, then to the extent necessary to
avoid taxation under Section 409A, Xxxxxx will be required to pay for such employee welfare
benefits during the six-month period
following his Termination of Employment; provided; however, that at the end of such six-month
period, Fidelity or the Bank will reimburse Xxxxxx for such payments.
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(iii) For purposes of this Agreement, the term “Release” means a general release that releases
Fidelity, the Bank, their affiliates, shareholders, directors, officers, employees, employee
benefit plans, representatives, and agents and their successors and assigns from any and all
employment related claims Xxxxxx or Xxxxxx’x successors and beneficiaries might then have against
them (excluding any claims for vested benefits under any employee pension plan of Fidelity or the
Bank).
(iv) If Xxxxxx violates any of the undertakings set forth in Sections 4, 5, 6 and 7 of this
Agreement after the Termination of Employment, any additional compensation and benefits under
Sections 3(b)(i) & 3(b)(ii) shall cease.
(v) Subsequent to the date of any written notice of termination provided to Xxxxxx pursuant to
Section 3(b) or by Xxxxxx to Fidelity pursuant to Section 3(c)(ii), Fidelity shall engage the
independent accounting firm regularly utilized by Fidelity (“Accounting Firm”) to provide to
Fidelity and Xxxxxx, at Fidelity’s expense, a determination of whether any compensation payable to
Xxxxxx pursuant to Sections 3(b)(i) & 3(b)(ii) (alone or when added to all other compensation paid
or payable to Xxxxxx by Fidelity and the Bank) constitutes a “parachute payment” (“Parachute
Payment”) as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”).
If the Accounting Firm determines that any compensation payable to Xxxxxx pursuant to Sections
3(b)(i) & 3(b)(ii) (alone or when added to all other compensation paid or payable to Xxxxxx by
Fidelity and the Bank) constitutes a Parachute Payment, the Accounting Firm shall also determine:
(A) the amount of the excise tax to be imposed under Section 4999 of the Code; (B) whether Xxxxxx
would realize a greater amount after Federal and Georgia income taxes (assuming the highest
marginal rates then in effect apply) if the compensation payable to Xxxxxx pursuant to Sections
3(b)(i) & 3(b)(ii) were reduced (assuming latest payments are reduced first) so that no amount
payable to Xxxxxx hereunder (alone or when added to all other compensation paid or payable to
Xxxxxx by Fidelity and the Bank) constitutes a Parachute Payment than he would realize after
Federal and Georgia income taxes (assuming the highest marginal rates then in effect apply) and
after imposition of the excise tax under Section 4999 of the Code if the amounts payable to Xxxxxx
hereunder were not so reduced; and (C), if the Accounting Firm determines in (B) above that Xxxxxx
would realize a higher amount if the compensation payable to Xxxxxx were so reduced, the amount of
the reductions. All determinations shall be made on a present value basis. The Accounting Firm
shall provide to Fidelity and to Xxxxxx a written report of its determinations hereunder no later
than forty-five (45) days prior to the termination date. No later than fifteen (15) days following
his receipt of the report from the Accounting Firm, Xxxxxx will notify Fidelity in writing of any
disagreement with said report, and, in such case, Fidelity shall direct the Accounting Firm to
promptly discuss its determinations with an accountant or counsel designated by Xxxxxx in his
written notice and seek to reach an agreement regarding same no later than fifteen (15) days prior
to the termination date, with Fidelity and Xxxxxx, each bearing the cost of their own accountants
or counsel. If no agreement can be reached within thirty (30) days after the expiration of said
fifteen (15) day period, the matter shall be promptly submitted to binding arbitration under
Section 16 hereof
by either party. The determinations so made shall be binding on the parties. If it is
determined hereunder that Xxxxxx would realize a greater amount after Federal and Georgia income
taxes (assuming the highest marginal rates then in effect apply) if the compensation
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payable to him
pursuant to Sections 3(b)(i) & 3(b)(ii) were reduced (assuming latest payments are reduced first)
so that no amount payable to Xxxxxx hereunder constitutes a Parachute Payment, then the amounts
payable to Xxxxxx pursuant to Sections 3(b)(i) & 3(b)(ii) shall be so reduced.
(vi) As a result of the uncertainty in the application of Sections 280G and 4999 of the Code,
it is possible that amounts will have been paid or distributed to Xxxxxx that should not have been
paid or distributed under this Section 3(b) (“Overpayments”), or that additional amounts should be
paid or distributed to Xxxxxx under this Section 3(b) (“Underpayments”). If based on either the
assertion of a deficiency by the Internal Revenue Service against Fidelity or Xxxxxx, which
assertion has a high probability of success, or controlling precedent or substantial authority, an
Overpayment has been made, that Overpayment will be treated for all purposes as a loan ab initio
that Xxxxxx must repay to Fidelity immediately together with interest at the applicable Federal
rate under Section 7872 of the Code; provided, however, that no loan will be deemed to have been
made and no amount will be payable by Xxxxxx to Fidelity unless, and then only to the extent that,
the deemed loan and payment would either reduce the amount on which Xxxxxx is subject to tax under
Section 4999 of the Code or generate a refund of tax imposed under Section 4999 of the Code. If
based upon controlling precedent or substantial authority, an Underpayment has occurred, the amount
of that Underpayment will be paid to Xxxxxx promptly by Fidelity. Whether an Overpayment or
Underpayment has occurred may be determined in substantially the same manner as the original
determination.
(vii) Fidelity and Xxxxxx shall each provide the Accounting Firm access to and copies of any
books, records and documents in the possession of Fidelity or Xxxxxx, as the case may be,
reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determinations and calculations contemplated by
this Section 3(b).
(viii) The Federal, state and local income or other tax returns filed by Xxxxxx shall be
prepared and filed on a consistent basis with the determination with respect to the excise tax
payable by Xxxxxx. Xxxxxx, at the request of Fidelity, shall provide Fidelity true and correct
copies (with any amendments) of his Federal income tax return as filed with the Internal Revenue
Service and corresponding state and local tax returns, if relevant, as filed with the applicable
taxing authority, and such other documents reasonably requested by Fidelity, evidencing such
conformity.
(c) Termination by Xxxxxx.
(i) Xxxxxx may have a Termination of Employment by Xxxxxx at any time upon at least 90 days’
prior written notice to Fidelity and the Bank. Upon such Termination of Employment Xxxxxx’x right
to compensation after the effective date of termination shall cease. Upon such a Termination of
Employment, the Base Salary which
accrued as of the termination date, the Incentive Compensation payable pursuant to Section
2(b) for the periods of employment and accrued but unused vacation pay will be paid after the
effective date of termination on the next normal payroll payment date.
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(ii) Notwithstanding the foregoing, if Fidelity or the Bank fails to perform any of its
material obligations hereunder and such failure continues for sixty (60) days after written notice
thereof by Xxxxxx to the Board, termination by Xxxxxx of this Agreement for such failure shall be
deemed to constitute a Termination of Employment by Fidelity and the Bank without cause under
Section 3(b) of this Agreement. A reduction in the responsibilities and authority of Xxxxxx as
provided in Section l(b) shall constitute a breach of a material obligation of Fidelity and the
Bank hereunder.
(d) Termination Upon Death or Disability.
(i) Xxxxxx shall have a Termination of Employment upon his death, or (10) business days after
written notice by Fidelity of termination during the continuance of the total disability (as
hereinafter defined) of Xxxxxx.
(ii) Upon Termination of Employment upon death or by Fidelity upon total disability, Xxxxxx’x
right to compensation after the effective date of termination shall cease . Upon such a
Termination of Employment, the Base Salary which accrued as of the termination date, the Incentive
Compensation payable pursuant to Section 2(b) for the periods of employment and accrued but unused
vacation pay will be paid after the effective date of termination on the next normal payroll
payment date. Fidelity and the Bank shall have no obligation to pay any compensation for periods
after the effective date of such termination under this Section 3(d).
(iii) The term “total disability” means the inability of Xxxxxx to substantially perform his
duties hereunder for a continuous period of ninety (90) days unless such period is extended in
writing by Fidelity, in which event, for such greater period. Total disability shall be deemed to
commence upon the expiration of such continuous ninety (90) day period or such greater period, if
so extended. In the event of any dispute as to the “total disability” of Xxxxxx or the expiration
of said ninety (90) day period or such greater period, if so extended, the matter shall be resolved
by the decision of a single physician, serving as an arbitrator, mutually selected or appointed in
accordance with the rules of the American Arbitration Association, Atlanta, Georgia. The decision
of the arbitrator shall be binding on all parties hereto. Xxxxxx agrees to submit medical records
requested and to submit to such examination and testing reasonably requested by such physician.
(e) Life Insurance Policies. Termination of this Agreement or the benefits payable
hereunder for any reason, including pursuant to Section 3(a), (b), (c) or (d) hereof, shall not
terminate the duty of Fidelity and the Bank to maintain or continue the Split Dollar Plan, or the
insurance policies with Great-West, Life Investors and Mass Mutual pursuant to Section 2(d) hereof,
including any replacement or substitute plans or policies hereafter mutually agreed to in writing.
Notwithstanding any other provision of this Agreement, if Xxxxxx is a Specified Employee and if
Fidelity determines that the maintenance of the Split
Dollar Plan, or the insurance policies with Great-West, Life Investors and Mass Mutual is
subject to Section 409A of the Code, then, to the extent necessary to avoid taxation under Section
409A, Xxxxxx will be required to pay for the maintenance of the Split Dollar Plan, and the
insurance policies with Great-West, Life Investors and Mass Mutual during the six-month
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period following his Termination of Employment; provided; however, that at the end of such six-month
period, Fidelity or the Bank will reimburse Xxxxxx for such payments.
4. Covenant Not to Compete. Xxxxxx agrees that during his employment with Fidelity or
the Bank and for a period of eighteen (18) months after Xxxxxx’x Termination of Employment for any
reason other than a Termination of Employment by Fidelity or the Bank, that Xxxxxx shall not, on
his own behalf or on another’s behalf, work in any management or executive capacity in the business
of providing banking or banking related services. This restriction shall apply only within a
50-mile radius of 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000. Xxxxxx agrees that because of the
nature of Fidelity’s and the Bank’s business, the nature of Xxxxxx’x job responsibilities, and the
nature of the Confidential Information and Trade Secrets of Fidelity and the Bank which Fidelity
and the Bank will give Xxxxxx access to, any breach of this provision by Xxxxxx would result in the
inevitable disclosure of Fidelity’s and the Bank’s Trade Secrets and Confidential Information to
its direct competitors.
5. Non-Solicitations of Clients and Customers. Xxxxxx agrees that during his
employment with Fidelity or the Bank and for a period of eighteen (18) months after Xxxxxx’x
Termination of Employment for any reason, Xxxxxx will not directly or indirectly solicit, contact,
call upon, communicate with or attempt to communicate with any client or customer of Fidelity or
the Bank for the purpose of providing banking or banking related services. This restriction shall
apply only to any client or customer of Fidelity or the Bank with whom Xxxxxx had material contact
during the last twelve months of Xxxxxx’x employment with Fidelity or the Bank. “Material contact”
means interaction between Xxxxxx and the client or customer which takes place to further the
business relationship. “Clients” and “customers” include, but are not limited to, depositors and
commercial, SBA or construction loan customers.
6. Non-Solicitations of Employees. Xxxxxx agrees that during his employment with
Fidelity or the Bank and for a period of eighteen (18) months after Xxxxxx’x Termination of
Employment for any reason, Xxxxxx will not recruit, hire or attempt to recruit or hire, directly or
by assisting others, any other employee of Fidelity or the Bank with whom Xxxxxx had material
contact during Xxxxxx’x employment with Fidelity or the Bank. This restriction shall apply only to
recruiting, hiring or attempting to recruit or hire any employee for the purpose of working in the
business of providing banking or banking related services.
7. Confidentiality, Proprietary Information and Inventions.
(a) During the term of Xxxxxx’x employment with Fidelity or the Bank, and at all times
thereafter, Xxxxxx shall not use or disclose to others, without the prior written consent of
Fidelity and the Bank, any Trade Secrets (as hereinafter defined) of Fidelity or the Bank, or any
subsidiary thereof or any of their customers, except for use or disclosure thereof in the course of
the business of Fidelity or the Bank (or that of any subsidiary), and such disclosure shall be
limited to those who have a need to know.
(b) During the term of Xxxxxx’x employment with Fidelity or the Bank, and for eighteen (18)
months after Xxxxxx’x Termination of Employment for any reason, Xxxxxx shall not use or disclose to
others, without the prior written consent of Fidelity and the Bank,
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any Confidential Information
(as hereinafter defined) of Fidelity or the Bank, or any subsidiary thereof or any of their
customers, except for use or disclosure thereof in the course of the business of Fidelity or the
Bank (or that of any subsidiary), and such disclosure shall be limited to those who have a need to
know.
(c) Upon Xxxxxx’x Termination of Employment for any reason, Xxxxxx shall not take with him any
documents or data of Fidelity or the Bank or any subsidiary or of any customer thereof or any
reproduction thereof and agrees to return any such documents and data in his possession at that
time.
(d) Xxxxxx agrees to take reasonable precautions to safeguard and maintain the confidentiality
and secrecy and limit the use of all Trade Secrets and Confidential Information of Fidelity, the
Bank and all subsidiaries and customers thereof.
(e) Trade Secrets shall include only such information constituting a “Trade Secret” within the
meaning of subsection 10-1-761(4) of the Georgia Trade Secrets Act of 1990, including as hereafter
amended. Confidential Information shall include all information and data which is protectable as a
legal form of property or non-public information of Fidelity or the Bank or their customers,
excluding any information or data which constitutes a Trade Secret.
(f) Trade Secrets and Confidential Information shall not include any information (A) which
becomes publicly known through no fault or act of Xxxxxx; (B) is lawfully received by Xxxxxx from a
third party after Termination of Employment without a similar restriction regarding confidentiality
and use and without a breach of this Agreement; or (C) which is independently developed by Xxxxxx
and entirely unrelated to the business of providing banking or banking related services.
(g) Xxxxxx agrees that any and all information and data originated by Xxxxxx while employed by
Fidelity or the Bank and, where applicable, by other employees or associates under Xxxxxx’x
direction or supervision in connection with or as a result of any work or service performed under
the terms of Xxxxxx’x employment, shall be promptly disclosed to Fidelity and the Bank, shall
become Fidelity and/or the Bank’s property, and shall be kept confidential by Xxxxxx. Any and all
such information and data, reduced to written, graphic, or other tangible form and any and all
copies and reproduction thereof shall be furnished to Fidelity and the Bank upon request and in any
case shall be returned to Fidelity and the Bank upon Xxxxxx’x Termination of Employment.
(h) Xxxxxx agrees that Xxxxxx will promptly disclose to Fidelity and the Bank all inventions
or discoveries made, conceived, or for the first time reduced to practice in connection with or as
a result of the work and/or services Xxxxxx performs for Fidelity or the Bank.
(i) Xxxxxx agrees that he will assign the entire right, title, and interest in any such
invention or inventions and any patents that may be granted thereon in any country in the world
concerning such inventions to Fidelity and the Bank. Xxxxxx further agrees that Xxxxxx will,
without expense to Fidelity or the Bank, execute all documents and do all acts
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which may be
necessary, desirable, or convenient to enable Fidelity and the Bank, at its expense, to file and
prosecute applications for patents on such inventions, and to maintain patents granted thereon.
8. Consideration for Non-Compete, Non-Solicitation and Non-Disclosure Provisions. In
consideration of Xxxxxx’x undertakings set forth in Sections 4, 5, 6 and 7 above, with respect to
periods after Termination of Employment, Fidelity or the Bank will pay Xxxxxx a “Non-Compete
Benefit” as described below. If Xxxxxx is not a Specified Employee, the Non-Compete Benefit will
be payable in 36 equal semi-monthly installments, each installment in an amount equal to sixty
percent (60%) of his Base Salary in effect immediately prior to the Termination of Employment
divided by 24, commencing on the 15th or last day of the month immediately following the
date of the Termination of Employment, whichever date occurs first, and then continuing on the 15th
and last day of each calendar month thereafter until all such installments are paid. If Xxxxxx is
a Specified Employee, the Non-Compete Benefit shall not become payable until the first
15th or last day of the month which is at least six months after Xxxxxx’x Termination of
Employment. All installments which would have otherwise been required to be made over such
six-month period if Xxxxxx had not been a Specified Employee, shall be paid to Xxxxxx in one lump
sum payment as soon as administratively feasible after the first 15th or last day of the
month which is at least six months after Xxxxxx’x Termination of Employment. After the lump sum
payment, the remaining semi-monthly installments (each equal to sixty percent (60%) of his Base
Salary in effect immediately prior to Termination of Employment divided by 24) will continue on the
15th and last day of each calendar month until all such installments are paid. If
Xxxxxx violates any of the undertakings set forth in Sections 4, 5, 6 and 7 of this Agreement,
Xxxxxx waives and forfeits any and all rights to any further payments under this Agreement,
including but not limited to, any additional payments, compensation or severance he may otherwise
be entitled to receive under this Agreement, whether pursuant to this Section or otherwise.
9. Specific Performance. Because of Xxxxxx’x knowledge and experience, Xxxxxx agrees
that Fidelity shall be entitled to specific performance, an injunction, temporary injunction or
other similar relief without the posting of a bond or other security in addition to all other
rights and remedies it might have for any violation of the undertakings set forth in Sections 4, 5,
6 and 7 of this Agreement. In any such court proceeding, Xxxxxx will not object thereto and claim
that monetary damages are an adequate remedy.
10. Maximum Payments. The total amount payable hereunder as severance pay (as set
forth in Sections 3(b)(i) & 3(b)(ii)) and consideration for the non-compete, non-solicitation and
non-disclosure provisions (as set forth in Section 8) shall not exceed three times Xxxxxx’x Base
Salary.
11. No Setoff. Nothing in this Agreement will limit or otherwise affect such rights
as Xxxxxx may have under any other contract or agreement with Fidelity, the Bank or
Affiliates, except as specifically set forth in such contract or agreement. Amounts which
constitute vested benefits or which Xxxxxx is otherwise entitled to receive under any employee
benefit plan, policy, practice or program of or any contract or agreement (collectively,
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“programs”) with Fidelity or the Bank at or subsequent to Xxxxxx’x Termination of Employment will
be payable in accordance with such programs.
12. Indemnification of Xxxxxx. Fidelity shall indemnify Xxxxxx and shall advance
reimbursable expenses incurred by Xxxxxx in any proceeding against Xxxxxx, including a proceeding
brought in the right of Fidelity, as a director or officer of Fidelity or any subsidiary thereof,
except claims and proceedings brought directly by Fidelity against Xxxxxx, to the fullest extent
permitted under the Articles of Incorporation and By-Laws of Fidelity and the Georgia Business
Corporation Code, as amended from time to time. Such indemnities and advances shall be paid to
Xxxxxx on the next normal payroll payment date after Xxxxxx’x rights to such amounts are no longer
in dispute; provided, however, that if Xxxxxx is a Specified Employee such payments shall not be
made before the date that is six months after the date of Xxxxxx’x Termination of Employment.
13. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given upon receipt when
delivered by hand or upon delivery to the address of the party determined pursuant to this Section
when delivered by express mail, overnight courier or other similar method to such address or by
facsimile transmission (provided a copy is also sent by registered or certified mail or by
overnight courier), or five (5) business days after deposit of the notice in the US mail, if mailed
by certified or registered mail, with postage prepaid addressed to the respective party as set
forth below, which address may be changed by written notice to the other party:
If to Fidelity or the Bank:
Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Board of Directors
0000 Xxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Board of Directors
If to Xxxxxx:
Xxxxx X. Xxxxxx, Xx.
c/o Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
c/o Fidelity Southern Corporation
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
14. Binding Effect. This Agreement shall inure to the benefit of and be binding upon
and enforceable by Xxxxxx and his estate, personal representatives and heirs, and by Fidelity and
the Bank and its successors and assigns. This Agreement and the payments hereunder may not be
assigned, pledged or otherwise hypothecated by Xxxxxx.
15. Entire Agreement. This Agreement, including the Split Dollar Plan, the insurance
policies with Great-West, Life Investors and Mass Mutual and the Xxxxxx
Management Continuity Agreement are intended by the parties hereto to constitute the entire
understanding of the parties with respect to the employment of Xxxxxx as an employee and
11
officer of
Fidelity and election as Chairman of the Board of Fidelity and the Bank and supersedes all prior
agreements and understandings, oral or written.
16. Binding Arbitration/Attorney Fees. Except as otherwise specifically provided
herein, including as provided in Section 9 hereof, Specific Performance, all disputes arising under
this Agreement shall be submitted to and settled by arbitration. Arbitration shall be by one (1)
arbitrator selected in accordance with the rules of the American Arbitration Association, Atlanta,
Georgia (“AAA”) by the AAA. The hearings before the arbitrator shall be held in Atlanta, Georgia
and shall be conducted in accordance with the rules existing on the date thereof of the AAA to the
extent not inconsistent with this Agreement. All reasonable costs and expense incurred in
connection with any such arbitration proceedings and those incurred in any civil action to enforce
the same shall be borne by the party against which the decision is rendered. To the extent that
Xxxxxx is entitled to reimbursement of any such costs and expenses, such reimbursements shall be
paid to Xxxxxx on the next normal payroll payment date after Xxxxxx’x rights to such reimbursements
are no longer in dispute; provided, however, that if Xxxxxx is a Specified Employee such payments
shall not be made before the date that is six months after the date of Xxxxxx’x Termination of
Employment.
17. Amendments. This Agreement may not be amended or modified except in writing
signed by both parties.
18. Waivers. The failure of either party to insist upon the strict performance of any
provision hereof shall not constitute a wavier of such provision. All waivers must be in writing.
19. Future Employers. Fidelity or the Bank may notify anyone employing Xxxxxx or
evidencing an intention to employ Xxxxxx as to the existence and provisions of this Agreement and
may provide any such person or organization a copy of this Agreement. Xxxxxx agrees that for a
period of 18 months after Xxxxxx’x Termination of Employment for any reason, Xxxxxx will provide
Fidelity and the Bank the identity of any employer Xxxxxx goes to work for along with Xxxxxx’x job
title and anticipated job duties with any such employer.
20. Governing Law. This Agreement shall be deemed to be made in and in all respects
shall be interpreted, construed and governed by and in accordance with the laws of the State of
Georgia, excluding its conflicts of laws.
21. Compliance with Section 409A. This Agreement is intended to satisfy the
requirements of Code Section 409A and shall be construed and interpreted in accordance therewith.
22. Definitions. For purposes of this Agreement:
(a) “Affiliate” means any entity with whom Fidelity or the Bank would be considered a single
employer under Code Sections 414(b) or 414(c).
12
(b) “Specified Employee” means an employee who is (i) an officer of Fidelity having annual
compensation greater than $135,000 (with certain adjustments for inflation after 2005), (ii) a
five-percent owner of Fidelity or (iii) a one-percent owner of Fidelity having annual compensation
greater than $150,000. For purposes of this Section, no more than 50 employees (or, if lesser, the
greater of three or 10 percent of the employees) shall be treated as officers. Employees who (i)
normally work less than 17 1/2 hours per week, (ii) normally work not more than 6 months during any
year, (iii) have not attained age 21 or (iv) are included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a collective bargaining agreement between
employee representatives and Fidelity (except as otherwise provided in regulations issued under the
Code) shall be excluded for purposes of determining the number of officers. For purposes of this
Section, the term “five-percent owner” (“one-percent owner”) means any person who owns more than
five percent (one percent) of the outstanding stock of Fidelity or stock possessing more than five
percent (one percent) of the total combined voting power of all stock of Fidelity. For purposes of
determining ownership, the attribution rules of Section 318 of the Code shall be applied by
substituting “five percent” for “50 percent” in Section 318(a)(2) and the rules of Sections 414(b),
414(c) and 414(m) of the Code shall not apply. For purposes of this Section, the term
“compensation” has the meaning given such term by Section 414(q)(4) of the Code. The determination
of whether Xxxxxx is a Specified Employee will be based on a December 31 identification date such
that if Xxxxxx satisfies the above definition of Specified Employee at any time during the 12-month
period ending on December 31, he will be treated as a Specified Employee if he has a Termination of
Employment during the 12-month period beginning on the first day of the fourth month following the
identification date. This definition is intended to comply with the specified employee rules of
Section 409A(a)(2)(B)(i) of the Code and shall be interpreted accordingly.
(c) “Termination of Employment” means the termination of Xxxxxx’x employment with Fidelity,
the Bank and all Affiliates; provided, however, that Xxxxxx will not be considered as having had a
Termination of Employment if (i) Xxxxxx continues to provide services to Fidelity, the Bank or any
Affiliate as an employee at an annual rate that is at least equal to 20 percent of the services
rendered, on average, during the immediately preceding three full calendar years of employment (or,
if employed less than three years, such lesser period) and the annual remuneration for such
services is at least equal to 20 percent of the average annual remuneration earned during the final
three full calendar years of employment (or if less, such lesser period), (ii) Xxxxxx continues to
provide services to Fidelity, the Bank or any Affiliate in a capacity other than as an employee and
such services are provided at an annual rate that is 50 percent or more of the services rendered,
on average, during the immediately preceding three full calendar years of employment (or, if
employed less than three years, such lesser period) and the annual remuneration for such services
is 50 percent or more of the annual remuneration earned during the final three full calendar years
of employment (or, if less, such lesser period) or (iii) Xxxxxx is on military leave, sick leave or
other bona fide leave of absence (such as temporary employment by the government) so long as the
period of such leave does not exceed six months, or if longer, so long as the individual’s right to
reemployment with Fidelity, the Bank or any Affiliate is provided either by statute or by contract.
If the period of leave exceeds six months and Xxxxxx’x right to
reemployment is not provided either by statute or by contract, the Termination of
13
Employment
will be deemed to occur on the first date immediately following such six-month period. For
purposes of this Section, annual rate of providing services shall be determined based upon the
measurement used to determine Xxxxxx’x base compensation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.
| FIDELITY SOUTHERN CORPORATION | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Chairman, Compensation Committee | |||||
| FIDELITY BANK | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Title: | Chairman, Compensation Committee | |||||
| XXXXXX | ||||||
| /s/ Xxxxx X. Xxxxxx, Xx. | ||||||
| Xxxxx X. Xxxxxx, Xx. | ||||||
14
ATTACHMENT A
INCENTIVE COMPENSATION
INCENTIVE COMPENSATION
For each calendar year during the term of the Agreement, the Compensation Committee
(“Committee”) of the Board of Directors of Fidelity will establish in its sole discretion (after
discussion with Xxxxxx) the percentage of base salary available for incentive compensation
consideration and the executive incentive compensation evaluation criteria, which will include
corporate and individual performance measurements, goals and objectives, both financial and
non-financial, for such calendar year prior to or at the commencement of the calendar year. Xxxxxx
will be paid incentive compensation (“Incentive Compensation”), if any, in cash as determined by
the Committee following its evaluation of Corporate and individual performance relative to the
executive compensation criteria established at the beginning of the calendar year and such other
measures or modifications as the Committee at its sole discretion, may consider.
The Committee has determined that in 2007 Xxxxxx will be eligible for 20% of base compensation
as Incentive Compensation, or such amount as may be determined by the Compensation Committee. The
Committee will evaluate Fidelity’s and Xxxxxx’x 2007 performance relative to the following
financial and non-financial measurements, goals and objectives, and such other measures and
modifications as the Committee, in its sole discretion, may consider in the determination of
Incentive Compensation to be paid for 2007.
| 1. | Financial Performance Measurements based on the approved 2007 Budget (These measurements may be modified for evaluation purposes at any time during 2007 based on changes in the strategic plan, the business plan, competitive or economic factors, changes in regulatory or accounting rules, laws or regulations or such other factors as the Compensation Committee, in its sole discretion, may determine.): |
| § | Net income | ||
| § | Earnings per share (EPS) | ||
| § | Return on equity (XXX) | ||
| § | Return on assets (ROA) | ||
| § | Total stockholder return | ||
| § | Loan growth | ||
| § | Asset quality | ||
| § | Deposit growth | ||
| § | Net interest margin | ||
| § | Noninterest income | ||
| § | Noninterest expense management and control | ||
| § | Business unit net income |
| 2. | Non-financial Corporate and Individual Goals including but not limited to: |
| § | Compliance with laws and regulations including Compliance and Safety and Soundness ratings of 2 or better | ||
| § | Hiring proven lenders and managers, as identified, to grow loans and deposits or develop, expand or improve operations and products and services and their delivery |
| § | Opening new branches and loan production offices to profitably expand market presence | ||
| § | Market share growth | ||
| § | Development/expansion of profitable products/services and delivery systems | ||
| § | Furtherance of or achievement of strategic goals and objectives | ||
| § | Individual performance based on competitive, legal, regulatory, and economic conditions | ||
| § | Such other factors as the Compensation Committee in its sole discretion may consider in determining the amount, if any, of Incentive Compensation to be awarded. |
The right of Xxxxxx to receive Incentive Compensation, if any, hereunder related to a
calendar year shall vest on the last day of such calendar year. In the event Xxxxxx is entitled
pursuant to the Agreement and the determination of the Committee at its sole discretion to
Incentive Compensation for a period of less than a full year, the Incentive Compensation, if any,
for such year shall vest on the last day of his employment.
Within 60 days after the end of 2007, management shall calculate and evaluate Fidelity’s and
Xxxxxx’x performance relative to the 2007 Criteria and provide such calculations and evaluations to
the Committee for its review.
The Committee shall, within 90 days after the end of 2007, make its own independent assessment
of the extent to which the 2007 Criteria and such other measures and modifications as the
Committee, in its sole discretion, may consider have been achieved; and, based on its assessment,
shall award Incentive Compensation in such amounts, if any, as it deems to have been earned by
Xxxxxx.
The Committee may revise or modify the 2007 Criteria for the year to the extent the Committee,
in the exercise of its sole and absolute discretion, believes necessary or deems equitable in light
of any unexpected or unusual or non-recurring circumstances or events, including but not limited
to, changes in accounting rules, accounting practices or procedures, tax and other laws and
regulations, or in the event of mergers, acquisitions, divestitures, unanticipated increases in
regulatory fees or costs, any extraordinary or unanticipated competitive or economic circumstances,
or any other factors as the Committee may determine.
In addition, in determining whether or to the extent that any one or more of the 2007 Criteria
have been met, the Committee may adjust the Corporation’s financial results to exclude the effects
of any or all extraordinary items (as determined under generally accepted accounting principles)
and any other unusual or non-recurring items that distort year-to-year comparisons of results or
otherwise distort results for the year (either on an entity, business unit, or consolidated basis)
and consider the impact on results of other events, including but not limited to, charges or costs
associated with restructurings of the Corporation, discontinued operations, acquisitions or
dispositions of business entities or assets, reorganizations, mergers or divestures, the effects of
competition or economic conditions, and of changes in tax, regulatory or accounting rules, laws or
regulations.
2
Payment is to be made in cash promptly after the amount is determined but in no event later
than April 15 of the calendar year following the calendar year for which the Incentive Compensation
is earned. The Committee, in its sole discretion, during a calendar year may make a non-refundable
prepayment of a portion of the Incentive Compensation to Xxxxxx if it believes that the partial
payment will not exceed the amount of the Incentive Compensation for that calendar year.
| FIDELITY SOUTHERN CORPORATION | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Chairman, Compensation Committee | |||||
| FIDELITY BANK | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | Xxxxx X. Xxxxxx | |||||
| Title: | Chairman, Compensation Committee | |||||
| XXXXXX | ||||||
| /s/ Xxxxx X. Xxxxxx, Xx. | ||||||
| Xxxxx X. Xxxxxx, Xx. | ||||||
3
